Recently, the March 2020 list for the Oriental Securities Cup “Race to the East” derivatives fund manager competition co-hosted by the Securities Times and Orient Securities was released. Due to the continued outbreak of the epidemic overseas, this has also had a certain impact on the operating ideas of various private equity firms.
Among them, “Muxin Pure Beta 0” under Shanghai Muxin Asset Management achieved monthly championship results in the “Options Strategy Group”. Recently, the Securities Times reporter had an exclusive conversation with ****, chairman and general investment manager of Muxin Assets. In addition to sharing investment experience, **** said that when investing, you first need to think about how to manage risk well, and whether you can bear the risk after management in order to obtain sustainable and steady returns.
Cambridge PhD starts private equity career
In previous interviews, products managed by many science and technology elites became monthly champions. **** was one of them. Judging from an academic background, **** obtained his PhD in quantitative finance from Cambridge University in the UK. He also studied at world-famous universities such as the National University of Singapore and Munich University of Technology in Germany, and is an elite “overseas returnee.”
Immediately after graduation, **** joined Credit Suisse and has successively been responsible for trading structured foreign exchange derivatives in emerging markets at its London and Singapore branches, and has managed more than 10 billion US dollars in derivatives assets. Referring to his work experience at Credit Suisse, **** told the Securities Times that this had an important impact on his risk management ideas.
“Since I experienced the 2008 financial crisis a few years before entering the business, I am very afraid of risk. I was always on Credit Suisse until I returned home. Credit Suisse is very mature in managing risk in investment management, and this experience has been very helpful to me.” **** said.
After leaving Credit Suisse, **** returned to China and began a private equity career. In August 2014, Muxin Asset was formally established with a registered capital of 10 million yuan. In November 2015, Mu Xin Asset obtained the qualification of a private equity fund manager, and obtained the qualification of the China Foundation Watch Association the following year. In addition to being the founder and chairman, **** is also the general investment manager of Muxin Assets, leading the development of a core strategic system.
“We are currently a fully quantitative management company. We mainly promote a full-policy options strategy system, focusing on futures strategies, and coordination with trend strategies, reversal strategies, and arbitrage strategies.” **** explained that Mu Xin's asset strategy system has continued since stabilizing in 2017 until now. “We don't believe in the transition and adjustment of strategic parameters; we believe more in hedging between different strategies.”
Extreme market conditions improve risk management
After the beginning of 2020, the COVID-19 pandemic had a major impact on the global market. During the March trading month, the overseas epidemic continued to break out, and market changes were also changing rapidly. However, for strategic trading products, the impact is generally not significant; on the contrary, it will generate some trading opportunities.
In response, **** told reporters, “This year's market is very extreme, but we are still running the same strategic system. We believe continuity in the strategic system is important”. He explained that its products mainly revolve around targets with active options. “We are fully quantifying. If the fluctuations are too large or too small, we will set the corresponding strategies in advance. But we can't subjectively judge what the market is like. Every small strategy will have its own logic for opening and closing positions.”
In terms of risk management, ****'s experience at Credit Suisse made Zhang particularly sensitive to risk. In designing the strategic investment system, he also placed more emphasis on managing the risk part. “If extreme market conditions occur, what will happen to the strategic system? We will always stress test these scenarios. The current strategy system is basically formulated from the perspective of risk management, but the recent market is still very extreme, and some are even scarier than the 2008 experience, so our risk management is also constantly being improved and upgraded.”
“Since entering the market in 2005, the only constant in the market is that it has been changing. In terms of this change, since the country is still in the process of opening up, there are even more of them than abroad.” In the midst of change and constancy, continuous learning became ****'s habit. “I myself will spend a lot of time reading financial engineering research reports, looking at new strategic ideas, and analyzing overseas market conditions and profit logic at a similar stage of development to ours.” Furthermore, learning about the investment experiences and investment philosophies of financial bosses is also one of the pleasures of ****'s daily life.
In terms of investment experience, **** pointed out when sharing with reporters that when investing, you first need to think about how to manage risk well, and whether you can bear the risk after management. If it is possible to achieve no losses or few losses in extreme markets, then profits can usually be preserved under normal circumstances.